Bangalore-headquartered public sector lender State Bank of Mysore is likely to sanction a loan of around Rs 500 crore to the Bangalore Metro Rail Corporation Ltd (BMRCL) to part-finance the metro rail project in the city.
Sources in the industry said that the bank has given its in-principle approval for the loan.
BMRCL is the joint venture between the Government of India and Government of Karnataka for building the metro rail facility through a special purpose vehicle. Both, the Centre and state governments have taken a 15 per cent equity each in the project.
The total project cost is around Rs 11,609 crore, which will be utilised to build 42.3 kms in two corridors. Of the 42.3 km, 8.822 km will be underground near the City Railway Station, Vidhana Soudha, Majestic and City Market, and the rest will be elevated.
While the East-West corridor, connecting Byappanahalli to the Mysore Road terminal covers a distance of 18.10 km, the North-South corridor from Hessaraghatta to Puttenahalli covers 23.70 km. The entire Phase-I is scheduled to be completed by June 2013.
The Bangalore Metro is expected to decongest the city, relieving some of the pressure on the city’s roads in Bangalore. BMRCL, which is presently conducting test runs, had postponed the launch of the first phase.
Meanwhile, multilateral lending agency Asian Development Bank has approved a $250 million (Rs 1,125 crore) loan to part-finance the metro project. ADB has said that the project, which used non-sovereign public sector lending mode, had an excellent replication potential for India and Asia. This is among the first major metro rail systems in India to use a leveraged finance model combining government funds and commercial loans, it added.
Sources in the banking industry also said that public sector lenders — United Bank of India, Vijaya Bank and Canara Bank — are also likely to commit funds to the BMRCL project.
The Karnataka government has also given an in-principle approval to build phase-II of the Bangalore metro, of six lines, covering 71 kms in the city.
According to data with the state government, Karnataka has already provided Rs 2,600 crore towards the first phase of the metro project of which Rs 683 crore was released in FY12.
